BP’s New Tactic in Oil Spill Claims: Go After the ‘Special Master’

BP PLC has been complaining for a year that money it has promised to pay to financial victims of the Deepwater Horizon disaster has been doled out to unworthy, uninjured claimants. In courthouse filings and newspaper ads, BP has targeted companies it says were not really harmed by the accident and their lawyers, as the oil giant’s estimate of the tab ballooned from $7.8 billion to $9.4 billion.

Now the oil company is taking aim at the guy doing the doling: Patrick Juneau, who was appointed by a federal judge in New Orleans to administer claims under a settlement between BP and lawyers for businesses along the Gulf Coast.

Last week BP wrote a letter to former FBI Director Louis Freeh, who at the request of the court has been looking into alleged mischief and fraud in the Deepwater Horizon claims office. The company asked him to turn over reams of documents – including any related to Mr. Juneau’s knowledge of alleged wrongdoing.

Though Mr. Freeh’s reports on the fund have found fault with several officials who either resigned or were dismissed in the past six months, they have praised Mr. Juneau. BP apparently wants that to change.

“A strong tone on ethical issues from top management is lacking,” lawyers for BP said in the letter.

In a separate statement BP spokesman Geoff Morrell said Mr. Freeh’s reports “have uncovered a troubling unprofessional culture at the settlement program, from top management down, that has allowed fraud, misconduct, and unethical behavior to flourish.”

Mr. Juneau said he was surprised by BP’s letter to Mr. Freeh but he wouldn’t comment on the motivation for the request. The claims office made many changes to its processes since Mr. Freeh was asked to review its operations, Mr. Juneau said, including expanding the fraud prevention staff, increasing screening of outside vendors and creating an ethics hotline.

“The reports of the Freeh Group confirm I have done my job,” Mr. Juneau said. “Any reports to the contrary simply are not correct.”

James Bucknam, CEO of Freeh Group International Solutions, LLC, declined to comment.

Disagreements over how settlements are interpreted are not unusual, said Alexandra Lahav, a law professor at the University of Connecticut who specializes in complex lawsuits. But the level of rancor among the parties to the oil spill settlement is surprising.

“It’s unusual to have the ‘special master’ being vilified here,” Ms. Lahav said, referring to Mr. Juneau’s formal title in the settlement process. “This is an emerging tactic I’ve not seen before.”

BP probably believes that replacing Mr. Juneau – possibly with Mr. Freeh – would help cut the size and number of settlement payments, said Blaine LeCesne, a Layola University law professor who is critical of BP’s tactics.

Lawyers for the thousands of individuals and businesses that participated in the settlement said BP joined them in recommending Mr. Juneau for the job as claims administrator back in 2012. But in a court hearing last summer District Court Judge Carl Barbier, who oversees the case, had to goad BP lawyers repeatedly before they grudgingly acknowledged they had backed Mr. Juneau.

“BP wholeheartedly endorsed Juneau up until they realized they needed a scapegoat for underestimating the cost of the settlement,” the lawyers, Steve Herman and Jim Roy, said in a statement.

Comments (5 of 26)

Few of the oil spills are closely monitored through EMSA's CleanSeaNet equipment.

6:47 pm January 31, 2014

Joe wrote:

The comments posted to date, especially the ones in favor of BP, appear to be written by idiot drones paid to post.

Their level of knowledge on this subject is curiously shallow, while the level of hyperbole is amazingly caustic.

As a businessman I can only wonder why someone, anyone, would pay people of such a shallow and incompetent background in an attempt to sway opinion!

4:59 pm January 28, 2014

Forthepeople wrote:

Robert, this is part of the problem. Far too much misinformation being spread and too many people are gullible enough to believe it. Don't be one of those--fact check first.
Here are the verifiable facts:
The contingency fees that go to the lawyers have been capped at 25% so at least 75% goes to the victim client.
There is nothing in the settlement agreement that excludes a strip club that can prove their losses, according to the methods identified in the settlement, from receiving compensation. While morally we may not like establishments such as this, that is no reason to exclude them.
If some of Mr Juneau's staff acted improperly (merely spending money at a claimant's business is not improper) then they should be held accountable--period. The legal profession is ust like any other profession (doctor, police, priest, etc) and has bad apples that embarrass those who genuinely are trying to do the right thing. If anything, like the examples previously mentioned, I personally think they should receive harsher punishment because they are in positions of trust. I'd love nothing more than to have all the bad apples removed from society.

2:06 pm January 28, 2014

Robert Cole wrote:

When Will The False Claims End??? $100 Billion? $500 Billion?

When The Greedy "Back Room Lawyers" From The Gulf All Billionaires! They Take 40%

1:59 pm January 28, 2014

Robert Jones wrote:

How About A Strip Club Getting $575,000! A Strip Club That Two Of Patrick Juneau's Officers Frequented Weekly, Then Resigned When They got Caught!